BY CHINEDU IBEABUCHI
Contrary to agitations that religious bodies should be exempted from taxation, the Financial Reporting Council said that religious bodies and not-for-profit organisations are liable to pay tax for their trading subsidiaries only.
A trading subsidiary is a profit making venture established by a not-for-profit organisation to meet obligations other than what is written in its Memorandum of Association as filed with Company and Allied Commission, CAC.
Speaking during its presentation of Statement of Accounting Standard, SAS 32 by not-for-profit organisations, Mr. Obazee Osayande, the Executive Secretary and Chief Executive Officer of the Council disclosed that not-for-profit organisations are expected to key in into the International Financial Reporting Standard, IFRS by January 2013 with a view to ensuring uniformity in the disclosure of accounts for easy accessibility.
He said, “It had been noticed that a number of entities operating on commercial lines, with charity, are claiming exemption on their income on the ground that the totality of the outfits are charitable institutions. The Company and Allied Matters Act, CAMA, provided that you either register as a public limited by guarantee or limited by share. Section 373 of CAMA provides that you prepare account and file report with the Corporate Affairs Commission.
“Non- profit organisations are registered as limited guarantee and they do not declare profit. They source their funds from the public, government institutions, etc. They are not profit oriented.”